WITH its quaint cobbled streets, charming fishermen’s cottages and sandy beaches, picturesque St Ives in Cornwall has long been a mecca for artists, tourists — and second-home buyers.
But with locals being increasingly priced out of the housing market the council decided three years ago to slap a ban on wealthy out-of-towners snapping up new-build developments as holiday homes.
It was hoped this would make housing more affordable for those who live and work in the town.
But their ban has backfired, according to a report by the London School of Economics. The developers have simply walked away, causing the number of new homes being built to shrink and for prices to soar.
And with the demand for second homes remaining sky high, the ban has just moved focus on to the limited stock of existing properties.
It has even caused house prices to go up in towns nearby.
Prof Christian Hilber, who led the study, said: ‘A ban merely shifts demand from new-build to existing homes, thereby reducing the share of permanent residents further and making existing housing stock even less affordable.’
He believes a better option would be a local tax on second homes, which could generate income for the local authority and discourage people buying property purely for investment purposes. But local councillors are not convinced by the report.
Andrew Mitchell, member for St Ives West, said the issue of high property prices had existed for 30 years.
He insisted he had not encountered anyone in the town complaining of being priced out as a result of the ban.
He said: ‘I think it is too early to tell and we need three, four or even five more years before we can say whether the ban has made things worse.’
However, he welcomed the idea of imposing an annual tax on second-home owners but added: ‘We are not legally allowed to do it.’